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issue 555 | 21 Jul 2024

Africa

New Africa Sustainable Development Report shows critical importance of scaled-up development financing

The United Nations Development Programme, the United Nations Economic Commission for Africa, and the African Development Bank (AfDB), presented the 2024 Africa Sustainable Development Report (ASDR), at an event held on the margins of the United Nations (UN) High-Level Political Forum for Sustainable Development in New York. Scaled-up access to concessionary development financing, strengthened climate information and early warning systems, and economic reforms are among the key recommendations raised in the new ASDR, titled Reinforcing the 2030 Agenda and Agenda 2063 and Eradicating Poverty in Times of Multiple Crises: The Effective Delivery of Sustainable, Resilient and Innovative Solutions. The report provides an in-depth review of African countries’ progress towards five sustainable development goals (SDGs) and their 32 targets to meet the 2030 Agenda and the African Union 2063 Agenda. The five SDGs under review are: ending poverty (Goal 1); eliminating hunger (Goal 2); combating climate change (Goal 13); promoting peaceful societies (Goal 16); and strengthening global partnerships (Goal 17).

Source: AfDB

Africa

President Samia: This is what hinders intra-Africa trade

On Tuesday, 16 July, President Samia Suluhu Hassan said that the lack of sufficient road connectivity among African countries remains one of the obstacles to trade prosperity and economic growth on the continent. President Hassan said that, unlike the other countries, Tanzania has made significant strides in road connectivity, both domestically and with those linking the country with its neighbours. The head of state was speaking in Matai Town, the administrative seat of Kalambo District, Rukwa Region, during the launch of the TZS133.2-billion road project stretching from Sumbawanga-Matai-Kasanga Port. The president, who commenced her tour of the region on Tuesday, 16 July 2024, inaugurated the TZS4.5-billion Kalambo District administration block that would enable citizens to receive different social services under one roof. Addressing the public during a live broadcast event, President Hassan said poor road connectivity forces most African countries to opt for product shipment to Europe and the rest of the world instead of trading with neighbouring countries.

Source: The Citizen

Southern Africa

SADC Parliamentary Forum transforms into Parliament

Mr Kalala Mayiba Constantin, Ambassador Extraordinary and Plenipotentiary of the Democratic Republic of the Congo (DRC) to Angola, on behalf of President Félix Antoine Tshisekedi Tshilombo, the President of the DRC, signed the Agreement Amending the Southern African Development Community (SADC) Treaty to transform the SADC Parliamentary Forum into a SADC Parliament. The agreement was signed at the SADC Secretariat in Gaborone, Botswana on 11 July 2024. The DRC became the 12th SADC member state to sign the agreement. The agreement was adopted by the SADC Summit of Heads of State and Government at its meeting held in Kinshasa, DRC on 17 August 2022. The agreement establishes the SADC Parliament as one of the institutions of the SADC under Article 9(1) of the SADC Treaty. Following the signature by the DRC, the agreement entered into force on 11 July 2024. This means that the SADC Parliament is legally established as one of the SADC Institutions under Article 9(1) of the Treaty.

Source: SADC

Angola / Portugal

Angola’s growth sectors open door to increased Portuguese participation

With historic cultural and linguistic ties, Portugal and Angola share a long history of cooperation spanning diverse economic sectors. In April 2024, Portugal exported EUR79.5-million and imported EUR1.65-million from Angola, resulting in a positive trade balance of EUR77.9-million. This trade exchange is driven by over 4 500 Portuguese companies currently exporting to Angola and approximately 1 200 companies of Portuguese origin or with mixed capital operating directly in the Angolan market. Taking place from 2-3 October in Luanda, the Angola Oil & Gas (AOG) 2024 conference will delve into the latest opportunities for strategic partnerships, bilateral cooperation, and foreign investment from Portuguese and global investors in Angola’s oil and gas and associated industries. The event serves to promote global engagement and collaboration, attracting delegations from major energy consumers and producers, including Portugal, China, the United Kingdom, the United States, and the United Arab Emirates, among other countries. For Portugal, AOG 2024 offers a strategic platform to engage with Angola’s oil and gas industry – as well as other priority sectors – for enhanced energy security and diversified economic growth.

Source: Energy Capital & Power

Botswana

IMF staff completes 2024 Article IV mission to Botswana

An International Monetary Fund (IMF) team, led by Mr Luc Eyraud, Division Chief in the IMF African Department and Mission Chief for Botswana, visited Gaborone and held discussions on the 2024 Article IV consultation from 2-12 July 2024. At the conclusion of the discussions, Mr Eyraud issued the following statement, in part: “Botswana’s economic growth decelerated from 5.5% in 2022 to 2.7% in 2023, below the long-run potential growth of 4%. A sharp decline in diamond trading and mining activities was the main contributor to the slowdown, as global demand for rough diamonds decreased. Despite the weak diamond market, the external position improved last year because of strong customs union revenues. Inflation has remained below the ceiling of the Bank of Botswana’s (BoB) objective range since spring 2023. After peaking at 14.6% in August 2022, inflation declined rapidly, mainly as a result of falling oil prices. The BoB has cut its policy rate twice by a cumulative 50 basis points since December 2023, following the 151 basis points increase that took place during 2022. Looking ahead, the economy is expected to decelerate further this year, with growth projected at 1%. The continued slowdown is mainly due to a fall in diamond production, partly offset by construction projects financed by the fiscal expansion.”

Source: IMF

Botswana

World Bank supports Botswana to enhance renewable energy and improve electricity services

The World Bank’s Board of Directors has approved its first lending operation supporting renewable energy development in Botswana. The Botswana Renewable Energy Support and Access Accelerator Project, approved on 11 July 2024, aims to transform the country’s energy landscape through enabling renewable solutions and improved electricity access. Botswana has vast untapped resources for renewable energy. It has set an admirable target to increase renewable energy to 30% of its energy mix by 2030 and 50% by 2036. The first wave of 335 MW renewable energy projects is already at different stages of development by private sector power producers. This new World Bank project will finance the necessary grid investment and Botswana’s first 50 MW utility-scale battery energy storage system to enable the first wave of renewable energy generation to be smoothly integrated and managed in the grid. In addition, the World Bank project will support the Government of Botswana’s continued effort to enhance energy access by financing the grid expansion to rural villages and improve electricity services in the Southern districts.

Source: World Bank

Ethiopia

Ethiopia Customs Commission discusses the adoption of international best standards and practices to establish and manage effective SEZs

The World Customs Organization (WCO), with the financial support of the Customs Cooperation Fund–China (CCF-China), and the technical assistance of two WCO experts from Mauritius and Botswana, organised a National Workshop on Special Economic Zones (SEZs) for the Ethiopian Customs Commission (ECC) in Addis Ababa, from 25 – 28 June 2024. A total of 20 customs officials involved in the operation in Free Zones/SEZs attended the workshop. The objective of the workshop was to provide capacity building resources for Ethiopian Customs with the knowledge and skills necessary to establish and manage effective SEZs that meet international best practices. In her opening speech, the Deputy Commissioner of the ECC, Mrs Muluwork Derese, underscored that the Ethiopian Government recognises the potential of SEZs as driver of economic growth. In line with this vision, the government has recently ratified new national legislation for the development and administration of SEZs. She further added that customs administrations should play a crucial role to enhance the attractiveness of SEZs and contribute to their successes.

Source: WCO

Ethiopia / United Arab Emirates

UAE inks USD817-million currency swap deal with Ethiopia

The Central Bank of the United Arab Emirates (UAE) partnered with the National Bank of Ethiopia on an agreement to establish a bilateral currency swap. The focus of the agreement is to enhance commercial and financial cooperation among the two countries. The initial deal is signed by the banking regulators of both countries to boost cross-border transactions and also link their messaging and payment systems. The deal between the two countries will strengthen the provision of liquidity in local currencies. Further authorising a settlement of cross-border transactions that is effective between Ethiopia and Emirates said the regulators in a joint statement. The deal will allow the local currencies to be exchanged up to a certain specific limit. This limit is set at a nominal value of up to AED3-billion (USD817-million) and ETB46-billion. The agreement between the two parties of foreign currency is to exchange currency in which the principal and interest payments are swapped. This is done on a loan made in one currency for a loan of equal value in another currency. “This initiative will pave the way for more joint business opportunities in the financial and banking sectors,” said Khaled Balama, UAE Central Bank Governor.

Source: The Global Economics

Lesotho

Lesotho ratifies Treaty on African Risk Capacity

Lesotho has ratified the Treaty establishing the African Risk Capacity (ARC). This is according to the Ambassador of Lesotho to Ethiopia and Permanent Representative to the African Union (AU) and the United Nations Commission for Africa, Ms Nts’iuoa Sekete. She said that on behalf of the Kingdom, she deposited the instruments of ratification at the African Union Commission recently. She said that Lesotho has become the 14th country to ratify the Treaty. Moreover, she highlighted that the ratification of the Treaty signifies Lesotho’s commitment to Africa’s integration goal, but most importantly, commitment to take the lead in responding and addressing risk on the continent, following numerous climate crises and disease outbreaks. Meanwhile Lesotho was elected Chair of the ARC Agency in April 2024 in the capital Addis Ababa by the Conference of Parties. ARC is a specialised agency of the AU, mandated to help member states improve their capacities to better plan, prepare and respond to weather-induced events and disease outbreaks.

Source: Government of Lesotho

Mozambique

USD650-million in FDI in three months

Mozambique secured USD650.5-million in foreign direct investment (FDI) in the first quarter, above the 2023 record, according to central bank data compiled recently by Lusa. According to the most recent statistical report from the Bank of Mozambique, this volume of FDI invested in the country resulted from shares and participations worth USD51.5-million (EUR47.2-million) and capital in supplies and commercial credits worth USD599-million (EUR549-million). Compared to the previous year, FDI in Mozambique had already grown by 2% in 2023 to just over USD2.50-billion (EUR2.3-billion). This performance compares with USD2.458-billion (EUR2.254-billion) in 2022. However, it is still far from the peak recorded in 2021, with investments in the area of natural gas production, which caused FDI in Mozambique to soar that year to almost USD5.102-billion (EUR4.678-billion). In 2023, the “major projects” category secured USD2.087-billion (EUR1.913-billion) in FDI in the form of capital. Even so, FDI performance in 2023 exceeded the government’s projection of USD1.425-billion (EUR1.306-billion). The Mozambican Government estimates that FDI in the country should double in 2024, driven by the natural gas exploration business. The Mozambican Government expects the country’s GDP to grow by 5.5 % in 2024 to MZN1.536-trillion (more than EUR22-billion).

Source: Club of Mozambique

Niger

IMF Executive Board completes the fourth and fifth reviews of the EFC arrangement and the first review of the arrangement under the RSF

On Wednesday, 17 July, the Executive Board of the International Monetary Fund (IMF) completed the fourth and fifth reviews of Niger’s economic and financial programme supported by the Extended Credit Facility (ECF) arrangement, and the first review under the Resilience and Sustainability Facility (RSF) arrangement. Niger’s ECF was approved on 8 December 2021 and complemented by the RSF in July 2023. The two arrangements were extended by six months until December 2025 to ensure sufficient time to implement key reforms and support the authorities’ fiscal consolidation efforts. The completion of the reviews allows for the immediate disbursement of SDR19.74-million (about USD26-million) under the ECF – bringing total disbursements under the arrangement to SDR157.92-million (about USD210-million) – and of SDR34.216-million (about USD45-million) under the RSF. Programme implementation was broadly on track at end-June 2023 but was subsequently disrupted by the political crisis, which led to the accumulation of external and domestic debt service arrears. Several structural benchmarks were not met, including the adoption of an oil-revenue management strategy. The authorities have taken corrective measures to address these deviations.

Source: IMF

Nigeria

Nigeria to begin Preferential Trade Initiative under the AfCFTA

In a move towards enhancing intra-African trade and economic integration, Nigeria set to launch its Preferential Trade Initiative under the African Continental Free Trade Area (AfCFTA) Guided Trade Initiative (GTI) on 16 July 2024, in Lagos. The launch of Nigeria’s participation in the second phase of the GTI indicates a new era of intra-African trade as several Nigerian businesses are eager and prepared to export and ship locally produced goods to target markets across the continent including Kenya, Cameroon, Uganda, Zambia and Egypt. Organised by the Nigeria AfCFTA Coordination Office in collaboration with the AfCFTA Secretariat, the initiative’s objectives include demonstrating Nigeria’s readiness for preferential trading under AfCFTA guidelines, promoting awareness among African businesses about the benefits of the GTI, and fostering collaboration among AfCFTA member states to support private sector involvement.

Source: Vanguard

Republic of the Congo

IMF Executive Board concludes the 2024 Article IV consultation and the fifth review of the ECF arrangement and approves USD43-million disbursement for the Republic of the Congo

On 11 July 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Republic of the Congo and the fifth review of the Republic of the Congo’s arrangement under the Extended Credit Facility (ECF), which was approved on 21 January 2022. The completion of the review allows for the immediate disbursement of SDR32.4-million (about USD43-million), bringing total disbursements under the ECF arrangement to SDR291.6-million. This financing from the IMF will continue to help the authorities implement their development policies, maintain macroeconomic stability, and strengthen economic recovery amid inflationary pressures and tighter financial conditions. Programme performance was broadly satisfactory, but structural reforms continue to experience delays. The authorities addressed the breach of performance criteria related to external debt service, for which a waiver for non-observance was granted, given the minor nature of the breach and the corrective actions taken, including the completion of the reorganisation of the debt management office.

Source: IMF

Senegal / Russia

Senegal, Russia to strengthen ties in energy, mining

Senegal and Russia are strengthening collaboration in the energy, mining and mineral processing sectors, following a meeting between Senegalese President Bassirou Diomaye Faye and Russian Deputy Foreign Minister Mikhail Bogdanov in Dakar on 10 July. During the meeting, President Faye and Minister Bogdanov discussed expanding trade and economic partnerships, improving contractual and legal frameworks and launching joint projects in geological exploration, mineral extraction and processing, energy, fisheries, and agriculture. Minister Bogdanov also inaugurated the Russia-Africa-Eurasia Chamber of Commerce and Investment in Dakar, aimed at strengthening commercial ties and creating a platform for dialogue among investors and businesses from these regions.

Source: Energy Capital & Power

Tanzania

World Bank Group launches new framework for inclusive, private sector-led, and resilient growth in Tanzania

The World Bank Group’s (WBG) Board of Executive Directors has endorsed the new Country Partnership Framework (CPF) for Tanzania to support the country in consolidating its status as a middle-income country, achieving a high level of human development, and contributing to the WBG mission to end extreme poverty and boost prosperity on a livable planet. The new strategy maximises the impact of the One-WBG approach, coordinating and leveraging the strengths of the International Development Association, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency in the country over the period financial year (FY) 2025 to FY2029. The new CPF prioritises several key areas.  It is informed by extensive consultations with a wide range of stakeholders as well as a country opinion survey and is aligned with the priorities identified in Tanzania’s Third Five-Year Development Plan and Zanzibar’s Five-Year Development Plan. The CPF’s focus on private sector-led growth is consistent with IFC’s Creating Markets Strategy which aims to support conditions for private enterprises to efficiently contribute to inclusive development.

Source: World Bank

Uganda

Significant victory for Uganda Revenue Authority as High Court delivers a thunderclap verdict on massive tax evasion scheme

To call it a thunderclap may still not do justice to the Uganda Revenue Authority’s (URA) stunning victory against a massive tax evasion scheme. In a decision delivered by the Honourable Justice Stephen Mubiru, Head of the Commercial Court, on 16 July 2024 in URA v Crane Autos, it was determined that a reasonably suspected tax evasion scheme provides adequate grounds for deferring the dissolution of an insolvent company under the Insolvency Act. Both the URA and the Commercial Court deserve the highest praise: to the URA for their unwavering pursuit of the case, and to the court for an expedient hearing of a complex matter within a few months. The learned Judge delivered his decision in his inimical treatise-like style, addressing all the legal aspects and breaking new ground in Uganda.

Source: ENS

Zambia

Zambia mining firm to build 300 MW coal-fired power plant

Zambia's Maamba Collieries will build a 300 MW coal-fired power plant costing an estimated USD400-million over a two-year period from August 2024, its local shareholder ZCCM-IH said in a statement. Zambia has been importing and rationing electricity after a devastating drought hit hydropower generation, the main source of power for Africa's second-largest copper producer. ZCCM-IH said Maamba had reached an agreement with anchor lenders for financing the construction and installation of the plant. "The total cost of the project is estimated at USD400-million, of which a consortium of debt (investors) will finance approximately USD300-million," the statement said. Maamba has already signed a 20-year power purchase agreement with Zambia's state-owned ZESCO for the project, ZCCM-IH added. Maamba set up its first 300 MW coal-fired power plant in 2016 under the initial phase of its power generation business, ZCCM-IH said. The new power plant will be identical to the existing plant and will consist of two generating units of 150 MW each, increasing the total number of generating units to four.

Source: Reuters